Probate is the legal process for authenticating a deceased person’s will, reviewing their assets, paying their outstanding debts and taxes, and distributing what remains to their inheritors. Probate law varies by state, but there are steps in the process that are common.
First, an executor is appointed and is normally the person named in the will. In California, we call this “executor” a “personal representative.” It is the executor’s responsibility to initiate the probate process. An executor can be a family member, a financial advisor, or any person the testator deemed capable of administering their estate. The executor files the will with the probate court, which initiates the probate process. A court officially appoints the executor as named in the will, giving the executor legal authority to act on the testator’s behalf.
The executor’s function is to locate and oversee all of the estate’s assets and to determine each asset’s value. The majority of the deceased’s assets are subject to the probate court, where the deceased lived at the time of their death. Real estate is an exception, and probate may extend to any county where the real estate is located.
The executor will pay any taxes and debts owed by the deceased from the estate. A notice of death is published and creditors are given a limited time to make claims against the estate for any money owed to them. If the executor rejects the claim, the creditor may take them to court, where a probate judge will determine the debt’s validity. The executor is responsible for filing the deceased’s final, personal income tax returns. The executor’s last task, via court authorization, is to distribute what remains of the estate to the beneficiaries.
Probate is required for any asset or account that does not have a joint owner or beneficiary named. In addition, in California a court process is required if the aggregate fair market value of all such assets i smore than $166,250. Otherwise, assets with an aggregate total value less than that amount can be handed with an informal probate without court (called a “small estate probate”). If a joint owner or beneficiary is named then title changes automatically and probate becomes unnecessary, unless of course the beneficiary has predeceased, is incapacitated, or is a minor.
If a person dies without a will, they are said to have died intestate. An estate can also be deemed instate if the will presented to the court is found to be invalid. The decedent’s assets of an intestate estate follow a similar probate process, beginning with the appointment of an administrator. An administrator functions like an executor, receiving all legal claims against the estate, paying outstanding debts, and the decedent’s taxes. Again, in California, we call an administrator a “personal representative.”
Administrators must also seek out legal heirs, including surviving spouses, parents, and children. The probate court will determine the distribution of the estate among its legal heirs. In the absence of any family or other heirs, remaining assets go to the state.
The more complex or contested an estate is, the longer the probate process can take to finalize. The longer the process, the higher the cost. In addition, in California the costs are determined by a schedule built into the law which is tied to a percentage value of the fair market value of an estate.
Here’s where it can get really expensive for a probated estate. California Probate Code § 10810 sets the maximum fees that attorneys and personal representatives can charge for a probate. Higher fees can be ordered by a court in special circumstances and for more complicated cases. Statutory probate fees are; 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and one-half % of the next $15,000,000. For an estate larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.
The statutory fees chart referenced below is a breakdown of California statutory compensation for attorneys and personal representatives in probate cases for various sizes of estates. It is important to know that both the attorney AND the personal representative are paid under this statute. Thus, if both the attorney and the personal representative-elect to receive a fee, the amount paid will be double that shown below.
|Value of Estate||Compensation to Attorney and Personal Representative|
If you want to avoid probate read our blog about Strategies to Help Your Family Avoid Orange County Probate Court.
As California estate planning attorneys, we can help you determine what planning tools are best for you to avoid probate, protect your family’s inheritance, as well as to protect you during your life. Please contact us or schedule a meeting should you need some guidance, we are happy to help.
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Kevin Snyder is a husband, father, and an Orange County estate planning attorney at Snyder Law, PC in Irvine, California. He’s all about family and passionate about estate planning, elder law, and veterans. He founded Snyder Law to help people be prepared and have the peace of mind they are protecting their families and aging parents for when life happens.